TSE YOUNG LAI v. CHAN TING LAI

HCA 521/2021

[2023] HKCFI 1416

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 521 OF 2021

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D E C I S I O N

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A.  Introduction

1.  The defendant (“D”) says that the plaintiff (“P”) owes him HK$24,000,000 (the “Principal Balance”). That sum is said to be the outstanding balance of the principal debt in the sum of HK$28,000,000 (the “Alleged Debt”). D has pleaded a counterclaim in that regard, and on 17 May 2022 took out a summons (the “Summons”) seeking summary judgment for inter alia that sum. The main issues relate to the enforceability of three Settlement Agreements (the “1^st Settlement Agreement”, “2^nd Settlement Agreement”, “3^rd Settlement Agreement”, and together the “3 Settlement Agreements”) between the parties, and in particular the 3^rd Settlement Agreement which D says he is counterclaiming on.

2.  Mr Johnny Ma SC leading Ms Stephanie Wong appeared for D. Mr CY Li SC leading Mr Jonathan Tai appeared for P.

B.  The scope of the application

3.  Originally, D also sought summary judgment for the following two other related matters, which Mr Ma at the beginning of the hearing informed this Court that D no longer does:

(a)  the 6 of the 12 cheques (“1^st Cheque” to “12^th Cheque”, and together the “12 Cheques”[1]) which P had issued pursuant to the 3^rd Settlement Agreement that were dishonoured (the “6 Dishonoured Cheques”); and

(b)  contractual interest in the total sum of HK$600,000 under clause 3(a) of the 3^rd Settlement Agreement.

C.  Pleadings and affirmations

4.  The Writ with general indorsement was issued on 7 April 2021. The Statement of Claim was filed on 1 June 2021 (“SOC”). On 24 August 2021, D filed his Defence and Counterclaim (“D&CC”). It was subsequently amended on 30 May 2022 (“AD&CC”). On 11 February 2022, D provided some further and better particulars to his AD&CC, which were subsequently amended on 30 May 2022 (“F&B” and “AF&B”). P’s original Reply and Defence to Counterclaim was filed on 1 November 2021 (“R&DCC”), which was subsequently amended on 22 August 2022 (“AR&DCC”).

5.  In support of the Summons and in reply, D has filed his first and second affirmations of 13 May and 26 September 2022 (“D/Aff 1” and “D/Aff 2”). He also relies on the affirmations of Ha Wing Ho, Peter (“Ha”, and “Ha/Aff”) and Tang Ho Yan (“Tang”, and “Tang/Aff”) both dated 16 May 2022. Ha and Tang were D’s legal advisers.

6.  In opposition P has filed his affirmation of 22 August 2022 (“P/Aff”).

D.  Parties’ cases, and the relevant facts

7.  The facts are in dispute.

8.  P and D are both businessmen in Hong Kong. D was experienced in investing in the stock market in Hong Kong.

9.  In respect of P’s claim:

(a)  P’s claim concerns the Alleged Debt, and 3 successive settlement agreements entered into in purported settlement of the same (i.e. the 3 Settlement Agreements);

(b)  The 3 Settlement Agreements were all signed by P and D. The 1^st Settlement Agreement is in Chinese. It was signed on about 25 June 2019. It was entered into in purported settlement of the Alleged Debt. The second and third ones are in English. They are dated 10 September 2019 and 31 July 2020 respectively. The 2^nd Settlement Agreement was entered into in purported settlement of the 1^st Settlement Agreement, and the 3^rd Settlement Agreement entered into in purported settlement of the 2^nd Settlement Agreement;

(c)  Pursuant to the terms of the 3^rd Settlement Agreement, P issued to D the 12 Cheques. D has managed to present and clear 6 of them (the “6 Cleared Cheques”), in the total sum of HK$5,680,000;

(d)  Whilst accepting that he has signed the 3 Settlement Agreements, P avers that:

(i)  the Alleged Loan in fact did not exist. The 3 Settlement Agreements and the 12 Cheques are hence not supported by consideration[2];

(ii)  alternatively, he entered into the 3 Settlement Agreements and issued the 12 Cheques under duress, which he particularized at §10 of the SOC; and

(iii)  further or alternatively, the 3 Settlement Agreements and the 12 Cheques were unconscionable transactions, which he particularized at §13;

(e)  He hence claims a declaration that the 3 Settlement Agreements and the 12 Cheques are not enforceable for want of consideration, alternatively that they be set aside or rescinded by reason of duress and/or as being unconscionable bargains. He also claims a sum equivalent to the total amount of the 6 Cleared Cheques.

10.  In respect of D’s case:

(a)  In relation to the Alleged Debt, D pleads that[3]:

“By several oral agreements entered into between [P] and [D], [P] became indebted to [D] in the total sum of HK$28,000,000 … arising from various transactions that occurred between 2015 and 2019.”

(b)  Some further particulars have been provided in the F&B, as follows[4]:

“(1) … In gist, there was an oral agreement entered into between [P] and [D] on or before 27 April 2016 in relation to a series of sale and purchase of the shares in Chinese Strategic Holdings Limited, a company listed on the Hong Kong Exchange (Stock No.: 8089) (the ‘Listco’). Due to the failure of [P] in repaying [D] as elaborated below, a further oral agreement was entered into between [P] and [D] in or around 11 September 2017

(2) …

(b) The date and time of each of the oral agreements have been set out in the table annexed to these Answers as Annex A[5]. Each of the oral agreements were entered into over the telephone between [P] and [D].

(c) [P] and [D] entered into an oral agreement containing, inter alia, the following material terms on or around 27 April 2016 (the ‘Agreement’)[6]

(i) [D] shall purchase and sell shares in the Listco on the market through an agent according to the instructions of [P] from time to time between 27 April 2016 and 11 September 2017.

(ii) If at the end of the series of purchases and sale, a net gain is made, such net gain shall be shared between [P] and [D], with 60% to [P] and 40% to [D] respectively.

(iii) If at the end of the series of purchases and sale, a net loss is made, [P] shall immediately pay and compensate to [D] such net loss, equivalent to the total amount spent on purchasing the shares of the Listco plus expenses in purchasing such shares, minus the revenue obtained from the sale of the shares.

(iv) The interest rate is 12% per annum for the money advanced by [D] to [P] for the purchase of the shares of the Listco.

On or about 11 September 2017, since there was already substantial net loss made for the sale and purchase of the shares in the Listco, [P] and [D] agreed[7] that pursuant to the Agreement, that would be the end of the series of transaction and that [P] shall pay [D] interest of 1% per month on the net loss recorded from 12 September 2017 onwards until repayment in full.”

(c)  F&B Annex A sets out some 25 transactions between 15 July 2016 and 11 September 2017 (the “Annex A Transactions” and the “Annex A Period”);

(d)  the F&B was amended by the AF&B. The first sentence of Answer 2(b) (underlined above, the “Underlined Portion of Answer 2b”) was deleted, and replaced by “Please refer to Answer (1) above (2)(c) below to Request 1.”

(e)  It is D’s case that the Allege Debt indeed exists, and that he and P entered into the 1^st Settlement Agreement when P failed to repay the same. When P failed to perform the 1^st Settlement Agreement, they entered into the 2^nd Settlement Agreement in settlement of the same, and ultimately the 3^rd Settlement Agreement when P failed to perform the 2^nd Settlement Agreement;

(f)  In each of the 1^st to 3^rd Settlement Agreements, P acknowledged the Alleged Debt;

(g)  The terms of the 3 Agreements have been pleaded. The consideration for each of them is pleaded to be “the forbearance to sue and to commence any legal proceedings against [P] yet to enforce his rights in relation to”[8] the Alleged Debt, the 1^st Settlement Agreement, and the 2^nd Settlement Agreement (as the case may be);

(h)  During the hearing, Mr Ma emphasized that it was the 3^rd Settlement Agreement which P is counterclaiming on. Given their significance, I summarise its material terms as follows:

(i)  In the Recitals, it is acknowledged that:

(1)  parties had entered into the 2^nd Settlement Agreement[9] in which P agreed to repay D and settle the Alleged Debt together with interest in full on or before 1 July 2020;

(2)  under the 2^nd Settlement Agreement, P agreed to transfer to D 50,000,000 shares in National Arts Entertainment Culture Group Limited (the “Shares”);

(3)  P had been in default of both payment and transfer of the Shares;

(4)  “Upon negotiation between the Parties, the Parties have come to an agreement on a new set of payment terms as set out in this Agreement.” (§D.);

(ii)  “[P] shall repay and settle the [Alleged] Debt to [D] in full on or before 30 June 2021” (clause 1);

(iii)  P issued to D the 12 Cheques:

(1)  the 1^st Cheque in the sum of HK$2,000,000 was for partial settlement of the Alleged Debt (clause 4);

(2)  the 2^nd Cheque in the sum of HK$1,680,000 was for interest up to 31 July 2020 (clause 5);

(iv)  10 posted cheques dated between 30 September 2020 and 30 June 2021 (i.e. the 3^rd to 12^th Cheques) each in the sum of HK$500,000 for partial settlement of the Alleged Debt (clause 2);

(v)  Clause 3(a) concerns interest in case of default. Mr Li challenges it as being a penalty clause. It is in the following terms:

“If [P] shall default in payment of any instalment sum pursuant to Clause 2 above, and such breach is not rectified within 7 days upon the notice of such default by [D], [P] shall be liable to pay an additional interest of HK$100,000 to [D]. For the avoidance of doubt, such interest is chargeable on each unremedied payment default on part of [P].”

(vi)  Clause 3(b) is an acceleration clause;

(vii)  Clause 6 concerns interest;

(viii)  P shall transfer to D the Shares on or before 21 February 2021 or such other date as may be agreed in partial settlement of the Alleged Debt (clause 7);

(ix)  Clauses 8 to 11 concern D’s authority to request sale of the Stocks, and the application of the proceeds;

(x)  Clause 12 concerns the status of any prior agreement, in the following terms:

“This Agreement shall supersede any prior promises, agreements, representations, undertakings or implications whether made orally or in writing between the Parties relating to the subject matter of this Agreement, and in particular the [2^nd Settlement Agreement] is hereby rescinded, discharged and released.”

(i)  D managed to present and clear the 1^st to 6 Cheques (i.e. the 6 Cleared Cheques) in the total sum of HK$5,680,000. The other 6 cheques (i.e. the 6 Dishonoured Cheques) have been dishonoured;

(j)  All allegations of duress and unconscionable bargains are denied;

(k)  D counterclaims that P “was and still is” in breach of the 3 Settlement Agreements in failing to repay the balance of the Alleged Debt in the sum of HK$24,000,000 (HK$28,000,000 less the 1^st, 3^rd and 6^th Cheques), to transfer the Stocks, and to pay interest as stipulated;

(l)  D seeks:

(i)  HK$3,000,000 being the total amount of the 6 Dishonoured Cheques;

(ii)  HK$24,000,000 being the balance of the Alleged Debt;

(iii)  HK$600,000 being the additional default interest under clause 3(a) of the 3^rd Settlement Agreement; and

(iv)  interest.

11.  In his AR&DCC, P essentially denies (or not admits) D’s averments, and repeats his claim. In particular, he denies having entered into the Alleged 27/4/16 and 11/9/17 Oral Agreements or having given any instructions or direction to purchase or sell shares in the Listco[10]. He denies being liable for the loss caused thereby. In relation to D’s pleas on forbearance to sue, he pleads that D knew that the Alleged Debt did not exist, that he did not request any forbearance, and that it is not a term of the 3 Settlement Agreements that D forbore to sue[11].

12.  In P/Aff:

(a)  P says that he did not enter into the Alleged 27/4/16 and 11/9/17 Oral Agreements, which he says are recent fabrications by D;

(b)  He denies owing D the Alleged Debt. He says that since about late 2016 or early 2017, D had on various occasions informed him that he (D) had sustained a loss in his investment in the shares of the Listco. D said that P should be responsible for those losses as P had in 2016 referred a person called Ben Lau to him in relation to the Listco. P says that[12] “Insofar as I know, Ben Lau had invited [D] to invest in the shares of [the Listco], which D agreed. Apart from this, I do not know the details of the agreement (if any) between [D] and Ben Lau.”;

(c)  P did not agree that he should be held responsible for those losses, and had complained to D. He liaised with D’s secretary. Her name was Vivian. P has produced as “TYL-7”[13] a handwritten note apparently written by her and addressed to D (the “Vivian Note”):

(i)  The Vivian Note is dated 3 October 2017. Part of its contents go as follows:

“陳生

re: Simon Tse Issues

#89, Tse 回覆，他不處理，
Lau & Tse 於9月20日會議後，

Lau confirms他自己負責。”

(ii)  P says that that “” denotes D’s agreement to the same;

(iii)  At the top right hand corner of that note, there are also according to P D’s handwritten notes with D’s signature, that “Ben will handle this week”;

(d)  P had also complained to Ben Lau. He secretly recorded one conversation he had with Ben Lau, the transcript of which he produces as “TYL-8” (the “Ben Lau Transcript”);

(e)  P says that D threatened him that unless he settled the Alleged Debt, “[D] would engage people or debt collector(s) to ‘do something’ in order to ‘collect’ the Alleged Debt from me, which I understood to mean in a manner which would adversely affect my reputation and safety and/or my properties.”[14]

(f)  P says that D further threatened him that unless P settled the Alleged Debt, the amount to be collected by those people would include an additional sum of not less than 30%. He says that D persisted in making illegitimate demands, which exerted chronic stress and pressure on him. He as a result suffered from chronic insomnia, had been dependent on hypnotics, in a poor mental state, been become very anxious, could not concentrate, and at one point in 2019 lost his focus and broke his leg during a bath. He says that he feared that if he did not submit to D’s threats, D or his agents might cause third parties to wrongly perceive him as someone who was unable to settle their debts. That would damage his reputation and business. He further feared that the amount of the Alleged Debt would be increased as threated. As a result, “I had no alternative but to submit to [D’s] threats and entered into the [3 Settlement Agreements] (and provided the 12 Cheques.)”[15]

E.  Applicable law on applications for summary judgments

13.  The applicable legal principles are not in dispute. Any differences between counsel are understandably matters of emphasis and perspective.

14.  Mr Li accepts that once the plaintiff has shown a prima facie case, it is for the defendant to show an arguable defence or some other issues to be tried. He submits that unless it is obvious that the defence put forward by the defendant is frivolous and practically moonshine, Order 14 ought not to be applied, that the issue is not whether the defendant’s assertions are to be believed, but whether those assertions are believable – Hong Kong Civil Procedure 2023, Vol 1 §14/4/9A, Pacific Electric Wire & Cable Co Ltd v Harmutty Ltd [2009] 3 HKLRD 94, §4 per Rogers VP, and 周軍英 v 樊少皇 [2018] HKCFI 2837 at §13.

15.  Mr Li submits that when there are doubts or suspicion as to the claimant’s case, unconditional leave to defend should be given –Billion Silver Development Ltd v All Wide Investments Ltd [2000] 2 HKC 262, pp. 268A-269E per Ribeiro J (as he then was), Che Oi Tai v Chen Chia Chin (HCA 3219/2002, 10 July 2003), §§13 to 14 per Deputy Judge Johnson Lam (as Lam PJ then was). Indeed, as summarized in Hong Kong Civil Procedure 2023, Vol 1 at §14/4/9B:

“Where there are unexplained features of both the claim and the defence which are disturbing because they bear the appearance of falsity and disreputable business dealings and questionable conduct, the court should not make tentative assessments of the respective chances of success of the parties or the relative strengths of their good or bad faith, and should not on such an examination grant the defendant conditional leave to defend, but should give unconditional leave to defend: Billion Silver …, applying Extraktionstechnik Gesellschaft für Anlagenbau GmbH v. Oskar (1984) 128 S.J. 417.…”

16.  Mr Li further submits that pleadings defect cannot be cured by affidavit supporting the application – Tan Khay Chuen v Ko Ping Shun Benson (CACV 238/2015, 8 July 2016) at §§23 to 24.

17.  I will apply those principles.

F.  The want of consideration defence

18.  This is P’s primary defence[16]. In gist, he says that the Alleged Debt did not exist, and that D knew of the non-existence.

F.1.  The relevance of the existence of the Alleged Debt

19.  Mr Ma’s stance is that the Court is not concerned with the underlying Alleged Debt at all, as the consideration for the 3 Settlement Agreements and the 6 Dishonoured Cheques is D’s “actual forbearance to sue at P’s express / implied request”[17].

20.  The first question to consider is therefore whether this Court is as submitted not concerned with the existence or otherwise of the Alleged Debt.

21.  For the following reasons, I do not accept Mr Ma’s submissions in this regard:

(a)  With reference to Media Asia Distribution Ltd v China Culture Program Investment Ltd [2009] 6 HKC 293 at §35, Mr Ma submits[18] that “[it] is trite” that forbearance to sue at the express or implied request of another constitutes sufficient consideration for an agreement or cheque. §3-12 of Foskett on Compromise, 9^th Edn[19] is to similar effect;

(b)  One side issue has arisen in this regard. Despite having described that proposition as “trite”, Mr Ma in the course of the hearing submitted that he in fact does not accept that forbearance has to be upon the request of the debtor before it can be good consideration, that the aforesaid passage from Foskett applies only to “actual forbearance” (but not promise to forebear), that D’s case is based on promise to forebear, and that he only assumes what he has submitted at §17 of his written submissions for the purpose of this application;

(c)  There are further some ambiguities as to whether D’s Counterclaim is one based a promise to forbear or actual forbearance. I note that on two occasions in his written submissions, Mr Ma in fact states that D’s case is based on actual forbearance[20];

(d)  Nonetheless, I note Mr Ma’s stance, and similarly make the assumption he makes;

(e)  Mr Ma then submits that:

“18. Once a compromise is reached, it is not open to the party against whom the claim is made to avoid the compromise on the ground that the claim was in fact invalid, provided that the claim was made in good faith and was reasonably believed to be valid by the party asserting it. In other words, a compromise is binding regardless of the validity of the claim: [Master Weaving Ltd v Hanbo Enterprises Ltd (HCA 676/2012, 21 July 2014)] at §89.

19. As such, it is not open to P to go into the underlying [Alleged] Debt and claim to avoid the 3 Settlement Agreements and the Cheques (which were issued in part performance of the 3^rd Settlement Agreement). The 3 Settlement Agreements and the [6] Dishonoured Cheques are supported by valuable consideration of forbearance to sue at P’s express / implied request.”

(f)  As they go, those submissions are in general correct. They however with respect gloss over the issue as to whether the Alleged Debt and underlying claims were made not in good faith;

(g)  Before proceeding further, I record the distinction Mr Ma made in the course of the hearing that it was the claim which D had forborne, but not the Alleged Debt;

(h)  At least for the purpose of this application, I do not find the distinction to be a material one. I accept Mr Li’s submissions that even if it was the claim which D had forborne, the rhetoric question remains – to forebear to claim for what? The answer must be the Alleged Debt, which the focus of the issue comes back to;

(i)  As explained in Foskett at §3-11:

“Baseless, frivolous, vexatious or illegal claim

It would seem that a forbearance from pursuing a claim (a) known by the claimant to be baseless or (b) which is vexatious or frivolous would constitute no consideration for a compromise based upon it…”

(j)  To the same effects are Chitty on Contracts, 34^th Edn., Vol. 1, at §6-050:

“A compromise of a claim which is legally invalid and which is either known by the party asserting it to be invalid or not believed by that party to be valid is not contractually binding. This rule can be explained either on the ground that merely making or performing a promise to give up a worthless claim cannot constitute consideration for the counter-promise, or (preferably) on grounds of public policy. As Tindal CJ said in Wade v Simeon : ‘It is almost contra bonos mores and certainly contrary to all the principles of natural justice that a man should institute proceedings against another when he is conscious that he has no good cause of action’.”

(k)  As I have summarised above, in relation to D’s pleas on forbearance to sue, P in reply avers that D knew that the Alleged Debt did not exist, that he (P) did not request any forbearance, and that it is not a term of the 3 Settlement Agreements that D forbore to sue;

(l)  Issue as to the bona fides of the Alleged Debt has therefore been specifically raised;

(m)  If D in fact knew of the non-existence of the Alleged Debt, such knowledge would necessarily bear adversely upon the bona fides of the 3 Settlement Agreements;

(n)  Hence, I do not accept that this Court, when considering whether triable issues have been raised, is not concerned with the existence or otherwise of the Alleged Debt.

F.2.  Whether triable issues raised as to the existence and bona fides of the Alleged Debt and the 3 Settlement Agreements

22.  Mr Ma submits[21] that P’s case that the Alleged Debt did not exist is incapable of being believed. He points to the contents of the 3 Settlement Agreements, which parties entered into on 3 separate occasions over a period of 13 months, that P issued the 12 Cheques, and that the 6 Cleared Cheques have even been successfully cleared. He submits that from an experienced businessman, that “defies common and commercial sense”.

23.  For the following reasons, I am of the view that triable issues as to the existence and bona fides of the Alleged Debt and the 3 Settlement Agreements have been raised.

24.  In the D&CC, whether before or after amendment, few facts relevant to the Alleged Debt have been pleaded. I have set them out above.

25.  The reason for that may be D’s belief that those facts are irrelevant to his Counterclaim[22]. I have explained why I do not accept that.

26.  The time when those “several oral agreements”[23] were entered into, their terms, the reasons for entering into them, the consideration, to name some of their important aspects, are all not pleaded.

27.  As said, some particulars are then provided by way of the F&B and AF&B. I have set them out above. As can be seen therefrom, there are inconsistencies amongst the 3 versions[24]. In particular:

(a)  In the AD&CC, “several oral agreements” are pleaded. The transactions giving rise to the Alleged Debt are pleaded to have occurred between 2015 and 2019;

(b)  In the F&B, the date and time of each of the oral agreements are pleaded to have been set out in the F&B Annex A. There are some 25 Annex A Transactions, hence suggesting that there were actually some 25 oral agreements (but not “several”);

(c)  The Annex A Period is between July 2016 and September 2017, but not “2015 and 2019”;

(d)  The total loss according to F&B Annex A was HK$31,787,638.61. But the amount of the Alleged Debt is only HK$28,000,000;

(e)  Then, the Underlined Portion of Answer 2(b) is deleted upon amendment;

(f)  But despite that deletion, that version remains the version affirmed to by D in D/Aff 1[25].

28.  I have set out Answer 2(c) of the F&B which plead the Alleged 27/4/16 and 11/9/17 Oral Agreements. But there remain the following material unexplained features: what was D’s role? Was he a security agent? Did he carry out regulated activities under the Securities and Futures Ordinance (Cap 571)? Why P needed to instruct D to purchase stocks of the Listco through an agent, but did not do so directly himself or through a security agent? D has indeed produced the April 2016 statement of a margin account he held with Business Securities Limited. That statement shows that he had been purchasing substantial number of shares in the Listco via that account. How did D carry out and execute P’s instructions, bearing in mind the fact that the nominal prices of shares change by the second? Who was that “agent”? Why would P have agreed to enjoy only 60% of any profit but to bear all loss? There are all very unusual features which D have chosen not to explain.

29.  It is further disturbing to note that:

(a)  D has produced no contemporaneous document which even makes reference to the alleged oral agreements; and

(b)  there is also no record of any of the instructions which D had received from P which resulted in the Annex A Transactions. Even on D’s case, there were some 25 of them. It is quite extraordinary that that there is not one single piece of paper recording any of the related instructions.

30.  There is further the involvement of Ben Lau which D has not explained:

(a)  I have set out P’s case in respect of Ben Lau. I have set out the material contents of the Vivian Note. I have also made reference to the Ben Lau Transcript;

(b)  D does not dispute that Ben Lau exists, or that he (D) had signed on the Vivian Note. He in fact accepts that there had been many rounds of negotiation amongst himself, P and Ben Lau. He seeks only to dismiss the relevance of the Vivian Note by saying that the contents were not final:

“There were many rounds of negotiation among myself and the Plaintiff and Ben Lau in relation to the various transactions and dealings regarding the Listco and the shares of 8228 and 391. As to [the Vivian Note], the handwritten note is a mere recording of one of the negotiation conversations, but did not constitute any final settlement agreement. The final settlement agreements were the 1^st, 2^nd, and 3^rd Settlement Agreements in writing.”

(c)  Importantly, D has not in D/Aff 2 refuted P’s evidence on the involvement of Ben Lau, that it was Ben Lau who invited D to invest in the shares in the Listco, and that he (P) should not be held responsible for any loss;

(d)  Despite P’s evidence on Ben Lau, D has given no explanation as to how and where Ben Lau fits in in terms of P’s alleged incurrence of the Alleged Debt;

(e)  I add also that the Vivian Note, bearing the date of 3 October 2017, is within the period “between 2015 and 2019”[26], and is a contemporaneous document.

31.  All the above are unexplained features of the claim which are disturbing. As observed by Ribeiro J in Billion Silver (at 268C-D), “[the] importance of there being doubts or suspicion as to the validity of the plaintiff’s case is that such doubts detract from the plaintiff’s right to summary judgment … If possibly genuine weaknesses were exposed in the plaintiff’s case, this casts doubt on the plaintiff’s right to invoke the summary procedure in the first place.”

32.  I have considered the above matters and the contents of the 3 Settlement Agreements in the round. P has indeed acknowledged his indebtedness to D. That opens up the question as to why he did so if the Alleged Debt in fact did not exist. As a matter of common and commercial sense, a businessman does not acknowledge any indebtedness unless he believes he owes it. P in explanation raises principally the issue of duress. I have set out his case on duress and the threat which he says D subjected him to. Looked at as they are, the threats and pressure were not the strongest of their type. But in answering the two important questions as to (1) whether the pressure or threat is legitimate and (2) the effect on the victim[27], credibility is engaged, and that in answering that second question, a subjective approach should be adopted[28]. If P’s case on the existence of Alleged Debt is in fact shaky, that would in turn be a factor relevant to the issue as to whether P had in fact somehow been pressurized into entering the 3 Settlement Agreements.

33.  Faced with a case of this nature, this Court finds most pertinent the following observations of Watkins LJ in Extraktionstechnik, as cited with approval by Ribeiro J in Billion Silver at 268F-H, that:

“We have said enough to demonstrate the intricate and, in part, as the hearing of this action may very well reveal, unsavory nature of this litigation. It is, of course, impossible to tell now where the truth lies and how much, if any, of the activity of both Plaintiffs and Defendant is tainted with illegality. What is, in our judgment, abundantly clear is that justice cannot possibly be said to be done until the acute issues which have been raised upon the affidavits have been resolved in a contested action. There appears to be ammunition available to both parties capable of inflicting serious wounds. We would not presume to be capable of assessing the chance of success for one as opposed to the other. Nor is it possible to predict what effect one kind of illegality or another, if established, will have upon the Plaintiffs or Defendant or both.

If those comments are justified, can the imposition of a condition upon the Defendant’s right to defend possibly be maintained? We most certainly would not impose a condition upon the Defendant. But that of itself is insufficient reason for declaring that the exercise of their discretion successively by Master Waldman and Webster J. was erroneous.”

F.3.  Conclusion

34.  For the reasons set out above, and having considered the totality of the evidence before me in the round, I reach the view that triable issues have been raised as to the existence of the Alleged Debt, D’s knowledge in that regard, leading to the question as to whether the Alleged Debt and the 3 Settlement Agreements were supported by consideration.

35.  On this basis alone, summary judgment for the Principal Balance should be refused.

G.  Duress and conscionable bargains

36.  I have expressed some views above. The pleas of duress and conscionable bargains cannot be considered in isolation. The existence or otherwise of the Alleged Debt form the important factual backdrop against which those pleas ought to be tested. In my view, they should also be investigated and tested as part of the trial.

H.  Overall disposition

37.  For the reasons set out above, I have formed the view that summary judgment for the Principal Balance should be refused.

38.  That leaves the question as to whether P should be granted unconditional leave to defend, or whether the Summons should be dismissed.

39.  P had filed his R&DCC before D took out the Summons. D chose to take out the Summons before he amended his F&B. P then on 22 August 2022 filed his AR&DCC. Non-existence of the Alleged Debt and D’s knowledge of it are therein expressly pleaded. D decided to press on with the application. D/Aff 2 was only filed on 26 September 2022. There are, as I have observed above, unexplained and disturbing features of D’s counterclaim which detract from D’s right to invoke the summary procedure in the first place.

40.  On the facts, and given the procedural background outlined above, I am of the view that this is an appropriate case for the Summons to be dismissed, and I so order.

41.  Upon dismissal of the Summons, I make a costs order nisi that D shall bear the costs of the Summons, with certificate for 2 counsel, to be summarily assessed. Any application for variation shall be made within 7 days from the date of this Decision by letter to this Court, upon receipt of which further directions will be given. Unless the costs order nisi has been varied, and for the purpose of assessment, P is directed to file his Statements of Costs within 14 days from the date of this Decision, D to file his Statement of Objection 14 days upon receipt, and P to file his reply 7 days thereafter, with the view of the assessment being conducted on the papers.